The Declining Trend in the Currency-Deposit Ratio During 2007-2014 Can

question 1

Multiple Choice

The declining trend in the currency-deposit ratio during 2007-2014 can be explained by

• A)the increased holdings of U.S. currency by foreigners.
• B)bank panics.
• C)a drop in the rate of interest paid on checking deposits.
• D)the increasing use of debit cards.

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Definitions:

Necessity

Essential goods or services required for basic living and welfare of individuals.

Luxury

High-quality goods or services that are not essential but are highly desired and associated with wealth or indulgence.

Substitutes

Goods or services that can be used in place of each other to satisfy consumer needs or desires.

Supply Curve

A graph showing the relationship between the price of a good and the amount of it that producers are willing to sell at each price level.